Wildcards and Opportunities in the 2025 Housing Market

Prepared by Square Feet Appraisals in collaboration with Delaware Beaches Online

Data Source: Bright MLS 

The 2025 housing market is shaping up to be one of the most unpredictable in recent history. Between political shifts, economic uncertainty, and evolving consumer behavior, real estate professionals must be prepared for both challenges and opportunities. Let’s break down the key wildcards and opportunities that will shape the market this year.

Wildcards: The Unpredictable Factors in 2025

A New Presidential Administration

With President Trump returning to office, executive orders and policy changes could significantly impact the housing market, especially in the Bright MLS service area.

• Federal workforce directives—such as staff cuts and return-to-office mandates—may shift demand away from suburban markets and drive up housing competition in closer-in metro areas.
• A potential immigration crackdown could reduce the already tight construction labor supply, making it harder to build new housing.
• Proposed tariffs on building materials could further inflate construction costs, limiting new housing supply.

Inflation’s Uncertain Path

While inflation showed signs of easing in 2023, the trend reversed at the end of the year. If inflation continues to rise:

• The Federal Reserve may slow down expected interest rate cuts, keeping mortgage rates higher for longer.
• Consumers facing increased costs of living may feel less financially secure, making it harder to save for a down payment and reducing housing demand.

The Return-to-Office Trend

Employers are becoming stricter about remote work policies, with more companies requiring in-office attendance.

• A Bright MLS survey found that 25% of remote workers would have to move if called back to the office full-time, while another 26% would face long commutes.
• Demand could shift from distant suburban markets back to urban and closer-in suburban areas, potentially reversing some pandemic-driven migration patterns.

Environmental and Climate Risks

Recent hurricanes in the Southeast and wildfires in California have demonstrated the growing impact of extreme weather events on housing markets.

• Some regions may see decreased demand due to heightened climate risks (e.g., parts of Florida).
• Other areas may require significant new construction due to disaster recovery (e.g., California).
• Even in the Mid-Atlantic, coastal buyers are increasingly factoring in climate risks, particularly rising insurance costs.

Opportunities: Where Real Estate Professionals Can Thrive

Increased Listing Activity

One of the biggest complaints in the 2024 market was a lack of inventory. That is expected to change in 2025.

• More homeowners—including those who bought in recent years—are looking to sell, creating new opportunities for buyers and agents alike.
• Agents who stay in close contact with past clients will be well-positioned to assist sellers entering the market.

Guiding Buyers and Sellers Through Changing Expectations

Market conditions are shifting, and expectations need to adjust accordingly.

• Buyers: With mortgage rates expected to stabilize around 6%, this range will become the new normal. Real estate professionals can help buyers navigate financing options and find the best properties within their budget.
• Sellers: Proper pricing strategies will be more critical than ever. Agents who help sellers set realistic expectations on pricing and negotiations will be invaluable.

Delivering Value in a High-Stakes Transaction

Real estate transactions are infrequent and high-risk for most consumers. Bright MLS research from 2024 found that buyers and sellers prioritize three key qualities in an agent:

1. Risk Mitigation – Protecting client interests throughout the transaction.
2. Expertise – Simplifying the complex homebuying or selling process.
3. Transparency – Providing clear, reliable information to aid decision-making.

With more than 80% of home sellers believing that working with an agent is the best way to sell a home, real estate professionals remain indispensable.

Helping Buyers Achieve the American Dream

Despite affordability challenges, homeownership remains a core part of the American Dream.

• Bright MLS’s national survey found that over 90% of consumers believe owning a home is essential to financial success.
• The typical homeowner has nearly 40 times more wealth than the average renter, largely due to home equity.
• Agents can help first-time buyers navigate rising rates and high prices, positioning them for long-term financial stability.

Final Thoughts: Embracing the Wildcards and Opportunities Ahead

The 2025 housing market will be defined by uncertainty, but that also means opportunities for those who stay informed and adaptable. Whether helping clients navigate shifting trends, setting realistic expectations, or capitalizing on new inventory, real estate professionals will play a vital role in guiding buyers and sellers through the year ahead.

This concludes our blog series on the 2025 housing market. Stay tuned with Square Feet Appraisals for ongoing insights and market updates throughout the year!